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Select U.S. cities see a home-inventory boost


Several of the nation’s most expensive housing markets saw an uptick in listings in July, a sign that the housing-inventory crunch could be easing a bit this summer in select cities.

Listings in the San Jose, California, metro area and Seattle were up 44 percent and 29 percent, respectively, year over year as of July, according to Realtor.com

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Other cities with double-digit, year-over-year gains in active listings of single-family homes included Providence, Rhode Island (up 23 percent); Portland, Oregon (up 19 percent); San Diego (up 18 percent); Dallas (up 15 percent); Sacramento, California (up 12 percent); and Jacksonville, Florida (up 11 percent).

San Francisco and Riverside, California, each had an inventory boost of 10 percent.

"We are definitely seeing inventories growing up and down the coast," said Michael Mahon, president of the Orange County, California-based First Team Real Estate. Mahon said the July data from the California Regional Multiple Listing Service (CRMLS) suggests that inventories statewide grew by 6.3 percent over the month in California and 14 percent compared to July 2017. 

He said listings for homes priced under $1 million grew year over year by nearly 15 percent in July, and listings priced over $1 million grew by just under 11 percent, according to the CRMLS.  

Mahon said that higher interest rates combined with tax changes last year that minimized homeownership perks in the federal tax code have likely squelched some demand, and he expects home prices to cool off. He also noted, though, that the California market continues to be supported by employment and a strong stock market.

"My personal opinion is that this [the inventory situation] is getting closer to an equilibrium versus it being a buyer’s or a seller’s market," Mahon said. "That isn’t a bad thing." 

A closer look at the national data, though, suggests that the picture remains grim for middle-income families looking for homes in lower price tiers.

On a nationwide basis, the inventory of single-family listings stood at 1.29 million in July. That was up 3 percent from the June level, but was down 4 percent compared to a year earlier. Also, the available homes in the lower-price tiers declined steeply.

Active listings of homes priced at or under $100,000 were down 18 percent year over year as of July, and the number of homes priced between $100,000 and $200,000 dropped 15 percent, Realtor.com data shows. Listings in the $200,000-$350,000 price tier were down 1.6 percent year over year.

By contrast, the inventories of homes in all the higher price categories were up compared with July of last year.

A recent report by Trulia showed a similar trend for the second quarter of 2018. Trulia noted a 12.2 percent spike in inventories over the first quarter, but the numbers were down 5.5 percent compared to the second quarter of 2017.

Trulia reported a notable 22 percent annual gain in inventories in San Diego. Several other major cities posted only modest annual gains in the second quarter, or declined.

“It doesn’t seem like the inventory woes are going to be over anytime soon, but there are a couple of data points that give us a glimmer of hope,” Trulia Senior Economist Cheryl Young told Scotsman Guide News last week. Young noted an uptick in single-family construction starts. Also, the 12.2 percent inventory surge in the second quarter over the first quarter was notable.

Inventories usually increase in the April-June period, but this year’s spike was unusually large.  “The previous year it was around 3 percent,” she said. “Obviously, while that doesn’t make a trend, we are seeing things that might indicate that there could be some relief in sight."

In the Southern California market, which has seen some of the highest price gains and tightest markets, inventories appear to have ticked up. This may be the result of rising interest rates and prices, which have put a damper on sales, said Daren Blomquist, senior vice president with Attom Data Solutions.  

“From what I hear anecdotally, I think we are starting to see an easing of inventory because of the easing of demand, at least in some markets,” Blomquist said during an interview this week. “It is still very much a seller’s market. I would expect to see inventory increase.”

This story was updated to include comments from California Realtor Michael Mahon. 




 

Questions? Contact at (425) 984-6017 or victorw@scotsmanguide.com.

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  1. Posted: Aug 14, 2018  8:31 ET
    By: jack mathew | infi
    1. 0


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